tv Newsmakers CSPAN September 19, 2010 10:00am-10:30am EDT
and then lawrence hunter. the president of this new group called alliance for retirement prosperity. they want to be the conservative alternative to aarp. then sheila krumholz will be talking about the latest numbers and the disclosure rules that make it difficult to determine where the must be is coming from. you've seen the front page stories about them. coming up next, "newsmakers" with hhs secretary. thanks for watching this morning. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . .
host: many of the provisions of the health care law passed earlier this year to take effect this week. joining us is the secretary of health and human services, kathleen sebelius. health and human services is the agency responsible for implementing much of the law. here with us are two reporters, susan of reuters and janet of "the wall street journal". they will begin the questioning.
guest: we heard grim numbers on thursday with more americans living in poverty and now nearly 51 million without health insurance. that is up from last year. what can be done about this? but it does not seem that people are getting the health care they need right now. guest: i do not think there is any question that the economy has taken a huge toll on the numbers of insured americans. and we are seeing that as a direct correlation is people lost their jobs, they lost their health coverage. that is what the president talked about last year. we had 15,000 people a month losing health insurance. and some of those were voluntary exit from the market when there were buying insurance on their own. a lot of them was employer- related insurance where they lost their covers and their spouse and children also lost coverage. so we have a situation where over 1/6 of the population of
america is uninsured, and that makes it more important than ever that we rebuild this market. there are provisions in place to stabilize the current market, to provide help to employers and too early retirement plans, a nd a new market by 2014. the importance of this bill this year. guest: the high-risk pools, we heard in some states that the interest in those has been low. are you concerned that some of these bridges are not insuring and of people, given the rising number of uninsured? eric -- are there any modifications that can be made to ensure more people? guest: there is no question that even though the high risk pools
have more affordable coverage and then might have been available in the past, because they have to offer coverage at a market rate, 100% for someone with a pre-existing condition is a bit unaffordable. it is a bit of a catch-22. it is better coverage at a more affordable price, but still not affordable enough. i think there are some positive indications that at least some of the strategies are working. for instance, giving states additional help from medicaid and children's health insurance, having increased match for state budgets that were sinking has kept people in shored in a market where they would -- in short and a market where there would not have been insured. we have more children and shorter than ever before. more children will qualify for the public plans -- more children are insured than
ever before. when you have an employer-based insurance coverage, it takes a huge hole. ways that we can hopefully get direct financial assistance to some of the employers that have early retirement plans. there are over 2000 companies to have applied for and are already getting help directly with their higher cost claims and early retirement plans. some of the bridge strategy is i think are proving to be essential at this difficult time. host: is there a cost associated -- do you know what the cost is of these companies that are asking for help with their early retirement plans? guest: congress allocated $5 billion to provide what really is in insurance terms of stock- loss policy. if you have an early retiree
plan, 80% of those plans can be paid by the early retirement coverage. it will be claims presented and payment made. there is no pre-funding of claims. this would be on the claims made bases. there is a total of $5 billion allocated from now till 2014 to stabilize the market. what we have seen, peter, is over 60% of employers used offer plans for early retirement, affordable coverage for those who left work before they were medicare eligible at age 65. it is now down to less than 30%. so that market has gotten very fragile. and the private markets, those individuals between 55 and 64 can be extraordinarily expensive. this is to try and help
stabilize the market until we get to 2014. guest: let's talk about the insurance industry. deerfield that they are prepared for the changes that will -- do you feel that they prepared for the changes that will take effect this week? if not, what will the administration do about it? guest: we have been working very closely with major insurers throughout the country. they were involved as the affordable care act was being designed in congress. what is happening in terms of consumer protections are not surprising. many companies stepped up early and said they would open their plans early for young adults to stay on their parents plans. we had a lot of a voluntary opening of plans earlier this spring. we had companies announced that they would stop the practice of rescissions well before the
deadline hit, and well before the 23rd of september. i think companies have known what is company, are prepared for it, are opening up their plans. we are working closely with state regulators to make sure that the new law will be followed, that people have a new way to make complaints if they feel that their company, their plan is not following the new law and get those disputes are resolved in a timely fashion. guest: one critical issue that the industry is waiting on is to see how hhs will set the medical-loss ratio. how close are we to seeing that? guest: we are working with the national association of insurance commissioners closely. they were directed by congress to make recommendations to our department on the definition of what are the elements that
should be considered as part of the medical costs for a ratio, and what is administrative or outside those costs. they had preliminary votes. a month ago, i recently wrote to them and asked that they expedite their work on phase one, which is those definitions. so we can go ahead and put out of regulation in the near future to begin to give companies the notion of what is in and what is out. the next step would be to look at the rest of the mechanism for the medical loss ratio, how we determine what is market destabilization, what kind of timetable there will be to implement this law, what kind of an impact, because i think there is a balance. we want consumers to get a bang for their buck. we want to make sure that the vast majority of their premium
dollars are paying for medical costs, not sellers, not advertising, not marketing, but salaries,r but for medical costs. at the same time, we do not want to see a company's exit the market place. for companies, they are nowhere near where congress set it. it will be difficult for them to comply with these regulations. consumers get a rebate if companies do not meet the target, and we want to make sure that the rebate is nice -- what is worse is to lose your coverage. it will be all balance moving forward. guest: i would like to ask you about the premium increases. there are a number of provisions that take effect on thursday, things like allowing a parent at
a child on their policy up to age 26, preventive care without any co-payments. what some consumers are hearing is that they are starting to get letters from their insurance company saying that starting on october 1, their premiums will increase. in some instances, we heard from companies that are increasing premiums over 20%. they are citing part of that as having to comply with these new regulations. in some instances, they are saying that those a batch of new provisions, five or six that they cite specifically, are increasing premiums as much as 1/2 of an 18% contribution. what will the administration do to prevent companies from increasing premiums, and do you think there needs to be a federal rate reviewed to discourage these kinds of increases? guest: first of all, a number of
new provisions a hit for the first time next week. we will see some of the worst abuses come to an end. people who have coverage can count on at that coverage when they get sick, when they needed the most. there trim its will not be stopped midstream. they can rely on the fact -- their treatments will not be stopped midstream. we will see preventive care without deductibles. this will make sure people get the screenings they need, identify problems before problems before acute, and in a long run, will lower costs, not increase costs. you're right. we're beginning to see some notices that suggest that passage of this act is directly responsible for double-digit rate increases. what we have our actuarial
studies which indicate in impact of 1% to 2%, once these consumer benefits are fully implemented. they are just beginning. so that trends and the company rate increases they are filing with departments around the country have no experience in the market. they have not measured these because they are not in effect yet. what we want to do is have the state regulators stepped up and review the rates, to actually ask for justification, asked for a cost trend, shine a bright light on what is happening, have a third party review. when that occurs, we have seen that those rate increases often are significantly decrease. we have provided additional resources to state regulators.
we have urged people to take a look at their statutory language to make sure they have the authority they need to do the review. many states right now do not have full rate review of 30. but that is where the primary review is. -- many states right now do not have a slow rate review authority. finally, there is a piece of the law that says that the department of health and human resources and needs to identify and shine a bright light on what are unreasonable rates. we are in the process of writing that regulation. i am a big believer that just some transparency, just shining a light, raising this to consumers'attention, putting together the website, which we have done, healthcare.gov, that gives people a snapshot of what is available. starting in early october, they will get pricing for those
plans. they can do some shopping in comparison. those steps a long will have a positive impact on what rates are being charged. guest: secretary sebelius, you mentioned you are writing this regulation it currently. what kind of support is the department -- is the administration is giving to states to hold down these increases? guest: we recently asked states to come forward and if they had a proposal for an enhanced rate reviews strategy we would provide grants up to $1 million dollars to fund those. we had about 48 states who have strategies, everything from a broadening their legislative authority, of hiring additional staff, hiring actuaries, putting together transparent websites, strategies that would be
enormous consumer helps. when we talk about these rate increases, when we talk about consumer assistance we are really talking about individual markets, people who are really shopping for their own insurance coverage because they do not have employer-based coverage or the small group market -- employers who have 25 or of your employees who often are paying the highest rates and have the least protection. those are the consumers who are out trying to negotiate on their own, very few choices, very few rules, stabilizing at market, having transparency in and calling on companies to make sure that the rates that they are charging actually have some basis in fact with healthcare costs is an important piece of this puzzle. host: this is "newsmakers". our guest this week, health and
human services secretary kathleen sebelius. here to interview her are two reporters who have been covering health care. next question. we have 10 minutes left. guest: in addition to premiums, there are concerns about consolidation in the health care industry. that would mean fewer plants to choose from. what is the administration's looking at? would you fight that? guest: we do not have oversight authority over market consolidation. i think that some of may make sense. there may be companies or books of business that will have to shift as we move toward a state- based exchanges, the new marketplace that will be up and running by 2014. it is always a concern that
monopolies are difficult to negotiate with, and what we see around a country already is that, in many places, there is only one company or at best two, but typically one company where people do not have any option other than to pay whatever is charged. that is why i think the new market, the 2014 market, the state as a base exchange, with companies to have to compete will be helpful to consumers. not only will they have more negotiating power, they will be in bigger pools, they will have the same choices that members of congress have. but companies will have to compete and that produces a much better deal. that is much more effective than heavy-handed regulation. in too many places, it does not exist. guest: we have been hearing more from the republicans about the
idea of defunding mandates in the health law. if republicans were to take back the house and the midterm elections, to what extent would this chip away at pieces of the law? guest: i do not think there is any question they could do some serious harm to what it has now begun, which is a major change in the rules of the road. so the power is beginning to shift from insurance companies to consumers and back to doctors. we have -- announcing this week these major consumer protections which will finally be in place. they have been talked about for decades. companies will not be able to recede in the policies anymore, dump somebody out of the market because they got sick and they
found a technical error. it will no longer be able to say to parents of a child with a pre-existing condition, we will not cover your child at all or cover the treatments that your child needs to get better they will not be able to stop treatment because somebody hits a lifetime cap. while that applies to a small number of people, those are sometimes life and death situations. we will have a focus on prevention and wellness which providers are thrilled about. what they know is too many people skip cancer screenings and mammograms. they do not get the full immunizations for their children because there is a financial barrier. out -- is important. i think what the republicans will be faced with is taking those benefits away. they will have to face their constituents who have their children enrolled on the family plan and say, that cannot happen any longer. or look at companies in their
districts who have now participated in the early retirement program and say, we will not pay those claims. that is not part of this puzzle. for seniors who will be seeing a 50% decrease in their prescription drugs in the doughnut hole starting next year, and get medicare as part of -- and an annual checkup, all those benefits will cease to exist. host: secretary sebelius, another threat to the health care a lot is the suit currently moving to the courts and florida. how threatened to do you feel by that suit? guest: they're actually a couple of suits. there is one consolidated suit in virginia, another in florida. frankly, the justice department and our lawyers are confident that the law has strong
constitutional basis. having said that, i think there is no question that these court actions are likely to continue whatever the decisions are at the virginia or florida level will likely be appealed by whatever party does not prevail and make their way through the court system. in the meantime, we will keep working on that the framework of this a bill which is really aimed at not only increasing coverage, increasing consumer protection, but ultimately, better care for every american. looking at the areas where we are spending a lot of money and we are not getting great help results, and lowering the cost people are spending right now that are not leading to great help results for our nation. host: 5 minutes left. next question. guest: you mentioned relief for small businesses. small businesses have been getting these letters notifying
them of the premium increases. how much interest have you seen in the small business tax credits that are part of the legislation, and to what extent will that offset the premium increases some of them are facing? guest: i think, hopefully, small business owners will see immediate benefits and a couple of ways. they do have right now, they qualify for up to a 35% tax credit for employee insurance. what i hear each and every day, janet, from small business owners is often health coverage is the most important factor to keep a good employee, to recruit a good employer. if they drop the coverage, which sometimes they feel forced to do because their rates increase, they are fearful that they will lose their best employees to go down the street or around the corner to get a job that has health benefits. so those tax credits are critical. they also i think will benefit
greatly from enhanced oversight at the state level for rate increases. small-business owners are really pay a premium rate now for the same coverage that all large company has they may be paying 18% to 20% more. they get penalized if one person if their employer -- in their employment is a cancer survivor or has diabetes because their rates can be sky rocketed. they will be huge winners in 2014 to be in these new marketplaces were suddenly they will have a much larger quote, a much greater chance to share that risk and spread their risks, and more significant negotiating power. we are trying to put initial held in place, make sure they get more rate review, more oversight, and then bridge to the 2014 when they actually will have a brand-new market to deal with.
guest: it is an election year, as i'm sure you know. i want as to what impact health care will have their. we see a number of polls where consumers are confused. they do not like the bill overall. if you ask them about specifics, they say they like the specifics. why is it so difficult to get the message out? guest: i do not think there is any question that front and center in americans' minds is unemployment and the economy. they are worried about their own situation. they are worried about their kids. they are worried, can they keep their house, can they send their kids to college? while i think they have definitely made progress over the place where we were, losing 750,000 jobs a month, having 15,000 people and they lose their health coverage, there is more recovery to go. so i think the health care debate is really often at a
lower level is too. people really want to note -- what they ask me all the time is, how does this affect me? how does this impact my business, my family? once the bill is explained through the lens of an individual, we see a much more positive response. this is why we urge people to go to healthcare.gov. a few details are putting in at the front and -- what is your age, what is your zip code, what e? for the first time ever, people have the opportunity to see the public plans and the private plans available and get information on how a lot impacts them and what is coming next. what is the timetable. it is a great one-stop shop to put the tools of back in the consumers' hands. guest: secretary, do you think
democrats should be doing a better job to sell this bill? even though jobs is an issue, do they need to get the information out before the election? guest: i have been in 30 states campaigning with a variety of members of congress, members of the senate, folks are running for governor, and what i find is that people are campaigning of andeten on the bill. they are meeting with senior to talk about what is happening with medicare. getting tough on fraud for the first time ever. they are meeting with small business owners. lots of health care providers, doctors and hospital administrators are thrilled with the idea that we will move into a different era of bundling care. they will have the opportunity to drive quality. we meet with people who are very
excited about the move into electronic medical record and held technology, that kind of science research that is going on around the country. what i find is, while i think there are snapshots of people running away from the bill, i think what i find is people really championing that between the recovery ac and the recovert and the health care ac, forward.are moving we will not be an effective economy without a good health care plan. host: as we move into flu season, how prepared is the u.s. government? guest: flu vaccineds are
available. we have a vaccine that includes a strain of h1n1, and includes two other virus strains. and we will have plenty of supplies. i urge people to take it seriously. flu shots are available right now. we will have an ample supply, but we know that elderly americans, a pregnant women, people with underlying health conditions are particularly vulnerable. we would urge everyone to get a flu shot. it is an easy way to be safe and secure, not only for yourself but protect the ones all around you who may be more susceptible to a serious disease the one who is getting the shot. and remember to sneeze like that. host: